Oracle fired another salvo at the Defense Department’s $10 billion cloud procurement initiative. The soap opera that is the Joint Enterprise Defense Initiative (JEDI) cloud procurement entered another dramatic turn last week with a new court filing by Oracle, which alleges former Defense Department employees have been “caught in a web of lies, ethics violations and misconduct” in the development of the JEDI solicitation.
The Court of Federal Claims filing — 128 pages that reads much like a paperback novel — reiterated and added more details about the potential role of two DoD officials who the software giant had already claimed had direct influence in the development of the JEDI solicitation while having job offers in hand from Amazon Web Services.
One of the officials, Deap Ubhi, has been at the center of this controversy for most of the year-long battle. Federal News Network now has confirmed through multiple sources that the third person in the latest redacted filing and who DoD found may have violated acquisition policy and laws is Victor Gavin, the former deputy assistant secretary of the Navy for command, control, communications, computer systems and intelligence. Gavin is currently head of federal technology vision and business development for Amazon Web Services. The second person who figures into this controversy is Anthony DeMartino, who served as a consultant for AWS through January 2017 and became deputy chief of staff for the Office of the Secretary of Defense.
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DoD’s internal investigation found JEDI didn’t suffer any prejudice from the participation of the three officials who are alleged to have had conflicting connections with AWS, although it did refer potential ethical violations to the department’s inspector general.
But Oracle says in the filing that the contracting officer didn’t interview Ubhi or anyone from AWS or anyone on the JEDI solicitation team, and that there were additional inconsistencies about Ubhi’s claim that he firewalled himself from the JEDI solicitation.
The complaint also details Gavin’s role in JEDI and what Oracle says are clear conflicts of interest and mistakes. Oracle alleges Gavin, whose name is redacted throughout the complaint for unknown reasons, “began employment discussions in the late summer of 2017 and continued the discussions throughout JEDI. Like Ubhi, [Gavin] continued participating on JEDI even after accepting an employment offer from AWS. For instance, in [Gavin’s] final JEDI meeting, held three days after [Gavin] accepted an offer to serve as a principal in AWS’ [federal technology] division, [Gavin] participated in and received access to the DoD source selection sensitive draft acquisition strategy.”
Oracle says DoD has determined both Ubhi and Gavin violated Federal Acquisition Regulation section 3.101-1 [improper business practices and personal conflicts of interest] and possibly 18 U.S.C. § 208 and its implementing regulations about taking actions that directly benefit their financial interests.
An AWS spokesman declined to comment about Oracle’s filing and declined to make Gavin or Ubhi available to answer questions citing ongoing litigation.
AWS, however, has over the last few months pointed to three separate investigations—one by the Government Accountability Office and two by DoD— that found no conflicts of interest that would’ve affected the JEDI procurement.
“Rather, Oracle seeks to engage in a broad fishing expedition primarily to find support for its claim that the solicitation at issue is tainted by alleged conflicts of interest involving two former Department of Defense employees and defendant-intervenor, Amazon Web Services, Inc.,” the government wrote in its January filing in response to Oracle’s initial filing.
AWS also has called Oracle’s amended complaint “wildly misleading and a desperate attempt to smear” the company by distorting the facts.
DoD said in its January response that Oracle is creating “unnecessary delays, burdensome information requirements, and excessive documentation” in order to conduct a detailed review of Ubhi’s actions.
At the same time, Oracle’s revised complaints seem to bring new details to light about both Ubhi and Gavin’s role in JEDI.
“Indeed, the record also makes clear that AWS failed to take the necessary steps to firewall Ubhi and [Gavin] fully and adequately when they joined AWS and the contract officer’s suggestion to the contrary contradicts existing law,” Oracle writes. “As previously discussed, the contracting officer knows that the affidavit submitted by [Gavin] was inaccurate. For example, [Gavin] averred in his original affidavit that he ‘had no access to the DoD’s acquisition plan, source selection procedures, or any other information that could provide a competitor an unfair advantage.’ But the contracting officer knew this statement was inaccurate given that she attended the JEDI Cloud meeting with [Gavin]. During which the participants discussed the source-selection-sensitive draft acquisition plan. Significantly, the contracting officer determined this much without conducting any search of the JEDI records related to [Gavin].”
While DoD, Oracle and AWS joust over facts in court over the next few months—the judge told the parties to expect a ruling by early-to-mid July—the software giant’s latest filing has to call into question whether JEDI is even viable any more. The court announced on May 9 that oral arguments over the protest would take place July 10 in Washington, D.C.
“Like their previous pleadings, Oracle’s supplemental complaint eloquently paints a damning picture of deeply flawed process. My guess is that, for casual followers who have been quick to dismiss Oracle’s prior filings as sour grapes, reading this document would be a real eye-opener for them,” said Steve Schooner, a Nash and Cibinic Professor of Government Procurement Law at The George Washington University in Washington, D.C. in an email to Federal News Network. “This is not business as usual, nor should it be the way DoD conducts its business generally. And it surely shouldn’t be the way DoD awards its largest, most important, highest profile contracts.”
Many long-time federal procurement experts said IF the details in the Oracle complaint are true or even mostly true, the JEDI procurement is starting to rise to the same level as the Air Force’s tanker procurement where Darlene Druyun, the principal deputy undersecretary for acquisition, ended up going to jail for inflating the price of the contract to favor her future employer, Boeing, and for passing information on the competing contractors.
Schooner said he would hope that DoD would do all it can to ensure it resolves even the optics of a conflict of interest around JEDI.
“DoD would be particularly inclined to do the right thing, send a strong message to the community and take immediate, bold, clear, and definitive action to ensure that a contract decision of this size and institutional significance was not tainted,” he said.
Oracle’s court filing also confirms something Federal News Network reported in March: that the FBI is investigating the JEDI procurement.
While Oracle offers no more details about the FBI’s involvement, the fact its lawyers discussed it twice in the complaint reinforces the seriousness of concern about JEDI.
Oracle said in its filing that the problems are not just with Gavin, Ubhi or DeMartino, but also with AWS’s actions.
“The contracting officer likewise treats AWS as somehow blame-free despite its heavy hand in the misconduct,” Oracle states in its amended complaint. “For instance, AWS necessarily knew both that AWS had entered employment discussions with Ubhi and that Ubhi was serving as the JEDI lead product manager. Yet, AWS did not advise DoD of the employment discussions or even require Ubhi to provide an ethics letter to support Ubhi’s simultaneous participation in employment discussions with AWS while serving as the JEDI lead product manager. Instead, AWS purportedly relied on Ubhi’s statement that he had no restrictions on his conduct notwithstanding that AWS necessarily knew that to be false.”
Oracle also contends that AWS knew it had offered Ubhi a job and that he didn’t recuse himself from JEDI.
Schooner said Oracle’s complaint should be the wakeup call to the Pentagon.
“In addition to the pathologies evident in the original acquisition strategy, the current conflicts narrative, as painstakingly laid out in the supplemental complaint, offers DoD a much needed — even if not initially welcome — lifeline to reassess and reevaluate their original approach to the procurement, and start again with a clean slate,” he said. “Frankly, DoD would do well to grab the rope, escape to safety and start from scratch on this procurement. Sadly, I fear that the level of investment to date may be too high to permit DoD’s leadership to come the right conclusion at this point.”
Oracle is asking the Court of Federal Claims to either find that AWS is ineligible for award or require DoD to further investigate and resolve the conflict of interest claims.